The 2018 Stock Market Bubble vs. Gold & Silver

The U.S. Stock Market is reaching its biggest bubble in history. When the price of the Dow Jones Index only moves in one direction… UP, it is setting up for one heck of a crash. While market corrections aren’t fun for investors’ portfolios, they are NECESSARY. However, it seems that corrections are no longer allowed to take place because if they did, then the tremendous leverage in the market might turn a normal correction into panic selling and a meltdown on the exchanges.

So, we continue to see the Dow Jones Index hit new record highs, as it moved up 765 points since the beginning of the year. Now, if w go back to 1981 when the Dow was trading about 800 points, it took five years to double itself by another 800 points. However, the Dow Jones Index just added 765 points in less than two weeks. It doesn’t matter if the (1) point increase in the Dow Jones today is insignificant compared to a (1) point increase in 1981, investors feel rich when the numbers are increasing in a BIG WAY.

This is the same phenomenon taking place in the Bitcoin-Crypto Market. Crypto investors who are used to 10-20 baggers (10-20 times increase) no longer have the patience to invest in a real company that might grow on a 10-25% basis annually. Why the hell put money in a real business that employees a lot of people when you can turn $1,000 into $50 million in a few weeks?

Unfortunately, the Bitcoin-Crypto Market has destroyed the new Millennials ability even to consider making old fashion sound investments in real capital-intensive companies. Today, the Entrepreneurs rather make money trading Cryptos on their I-Phone, sporting a few thumbs-up Selfies, compared to the previous generation of business people doing deals out of their briefcases.

Regardless, as the stock markets head even higher, it should provide a big RED WARNING LIGHT to investors that all is not well. I put together my first YouTube video titled, THE STOCK MARKET BUBBLE vs. GOLD & SILVER;

In my video, I show how the Dow Jones Index and certain stocks are truly in bubble territory. I also explain why the gold and silver values compared to the Dow Jones and these stocks are tremendously undervalued. Furthermore, I provide an update on the cost to produce Bitcoin versus Gold.

I plan on putting out 1-2 new videos each week on various subjects and believe the video platform will be able to explain some difficult concepts and analysis about how Energy and the Falling EROI will impact precious metals, mining, economy, financial system and our future society.

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67 Commentson "The 2018 Stock Market Bubble vs. Gold & Silver"

You love to bash the cryptos. The entire sector is barely 650 billion not even the value of Apple, ONE STOCK. You are way way out of perspective. What are you PM guys afraid of? The mark of the beast? Visa and MasterCard fits that bill, they can be shut down by the banks while cryptos cannot. The old dinosaur PM boyz love to bash cryptos. Why? I think because the real completion is vs the pm stocks which have done NOTHING. TPTB can create infinite fiat to control the markets. They cannot create cryptos and have limited control over them. The young genius software writers are creating an entirely new financial system while you Steve keep crying wolf banging the drum for your one trick pony, EROI that just might happen any day now so just wait and wait and wait, next year, really….

You also cannot buy groceries with precious metals or precious metals stocks. I have all my physical metals. I got tired of the experts telling me the end was near and not seeing one penny of return from my PM stocks. So I took that money and went into cryptos. I guess I should have just kept cursing the darkness…..

Actually there are places where one can obtain credit card or debt card backing them with PMs or cryptos. These cards can then be used anywhere.

IMO cryptos and PMs are quiet similar in that their individual quantity cannot be inflated.
Sure there are many different cryptos, but there is also many different metals.
Over time the public has placed a rated value on metals, gold over silver over copper, etc. We are in a new paradigm where the value of each crypto in relation to everything else is being discovered.

Many are resistant to change because in a new paradigm all the pieces don’t quiet fit together as yet. They seem comfortable dealing with electronically trading inflatable dollars, while resisting what they do not understand.

Very few understand how cell phones work, but they have no problem using them.

Well at least you own precious metals, that’s real money because they carry no counter party risk. Stocks, bonds, and cryptos all carry counter party risk as you need an honest and functioning system to redeem their value.

Sadly I don’t think we have an honest system and when the EROEI ratios of our fossils fuels finally hit the wall you may not have a functioning system for cryptos.

Gold and silver have always been money and since time is a factor in any money, they will always be money. Actually the very base of the money tower. When the foundation goes, the money tower (debt) will collapse but people will always recognize PMs as money.

Funny you should mention Steve “bashing” the cryptos… about a year ago he was writing a few articles which were quite favourable to them. Something happened obviously. He must have learned something that curbed his enthusiasm. I’d love to find out what it was! In any case a fair few of his readers including myself always pointed out the serious issues with cryptos and I think he wised up.

No problems GLP… we leave them all for you to become filthy rich. Best wishes.

Opinions are like ….. everybody has one!
FACTS:
Crypto coins are nothing more nor less, than electronic two lip bulbs, and thus a purely fictitious form of wealth, relying upon a computer system for their survival.
Gold is… GOLD! It will never go to zero. It remains real money and the ONLY true wealth preserver. It just is what it is.
Blockchain tech will have a future in global commerce, just not as a store of wealth.

I find this site enormously beneficial as far as fundamental research is concerned. However, there is ZERO actionable advise here. The doom & gloom predictions have gone on for at least the past 10 years. Invest in PM’s is a worn-out paradigm that rings quite hollow with anyone who actually has done that. I have taken delivery of physical gold bullion some years back and decided end of last year to sell it back to the very same source that sold it to me. Well – no problem – except that a full gold essay was required to ascertain that the numbered, certified bars that were to be handed back were not tampered with. ‘Ya never know…………….’ At the time of the essay there were 8 people in the room. Security guards at the door. The essay specialist. Representatives of the buyer etc. etc. The result: a lousy buy/sell spread, extra costs for the essay & time and money lost because hold-in-the-hand gold, as a store of wealth works until you actually do it and get to tell the tale. Then it doesn’t. Try to take a gold coin or gold bar across a border into an other country. You have to declare it leaving and you have to declare it arriving. Does that sound like capital controls to anyone? A Bitcoin is a Bitcoin. No need to verify or essay its worth. No wonder Bitcoin is called digital Gold. It does everything Gold does but it does it much better. I can send it across the globe without anyone’s permission. Great stuff. Try that with your PM’s. Steve’s research is all based on fundamentals as mentioned. He is doing a great job here – no doubt. However, there are no more fundamentals in any market – except, perhaps in Bitcoin. The world-wide fiat printing orgy could go on for many more years to come. It will last until the powers-that-be pull the plug. Do you really want to waste another 10 years reading this non-actionable doom porn? Most people do not have the luxury of time. Most do not have the luxury of storing their wealth/past energy in physical gold just to wait for the system to one day down the track declare gold as a prohibited item. Wars have been fought over gold. 1000’s of tonnes of physical have been sacrificed in order to keep the metals caged up. Does anybody really think that the ‘system’ will just walk away saying: ‘ahhhh well, we’ve had a great run for the past 5-6 decades – it’s ok, you can have your PM’s now and let them run………’ The power to be able to print as much fiat as is desired trumps EVERYTHING! That’s why Credit Suisse has estimated in 2016 the combined net worth of the Rothchild family to be at between TrillionUSD230-240!!!!! Let that sink in for awhile……………….

You bring up many interesting points. And yes, I only focus on the fundamentals, and NO, I don’t provide “ACTIONABLE” information on investing. That is not my style. I have been recruited by several large newsletter organizations to write a newsletter for them and to provide that ACTIONABLE material. I find the majority of newsletters that do that are pure rubbish. But, that is my opinion.

However, you have no idea that Bitcoin and many of the Cryptos are indeed Ponzis. Don’t worry, it will become apparent in time. But, now… people have been DUPED once again as they have been over and over again going back to the TULIP MANIA BUBBLE.

Lastly, I have stated that while I am not a PROFESSIONAL FINANCIAL ADVISER… I CANNOT GIVE OUT ADVICE, I own the precious metals and believe others should consider it. But, they should research and do their own fact-finding.

Hello GLP. I think you are mistaken with the message on this site. The way I interpret the message is that the gold and silver are the real safe investments to hold not the present best investments for great returns like ICO investments. How do you determine which is the best ICO or coin to buy? Best wishes.

David:
To enable full screen viewing, click through the YouTube logo at the bottom right of the embedded video. This will spawn a new window, on https://youtu.be/uM_LBoHWjrg which is the video, but on Steve’s YouTube site. Once that loads, you may left-click the bottom right “full screen,” tab and
view in the largest format.

Steve: Thank you for all your work on srsroccoreport.com and for launching your YouTube site.

Pan American Silver Corp. (Nasdaq, TSX: PAAS), the world’s second-largest primary silver producer, is projecting that its output of silver will climb over the next three years.

Officials released production data showing fourth-quarter output of 6.6 million silver ounces and 43,700 ounces of gold. This brings the full-year totals to 25 million ounces of silver and 160,000 ounces of gold. Both are within guidance.

Further, Pan American said it achieved a decade-low consolidated cash costs of $4.55 per silver ounce in 2017, after by-product credits. The company also produces zinc, lead and copper.

For 2018, Pan American projected silver production of between 25 million and 26.5 million ounces. Gold output was put at 175,000 to 185,000.

While I appreciate your reposting of Pan American’s production and financial data, CASH COSTS are not a good metric or complete costs for producing silver. I would suggest that you read some of my archived articles on Silver Production Costs.

Thanks for the additional information. However, the use of AISCOS does not include all costs and it also deducts By-Product Credits of base metal and gold revenues. This is like a Hot Dog Vendor who sells 50% of his sales in Cokes, takes the Coke sales and reduces his HotDog cost which is $1 a Hot Dog down to $0.50.

To get a TRUE ESTIMATED BREAK-EVEN we have to look at Net Income or Adjusted Income. We can also look at FREE CASH FLOW.

However, Pan American Silver’s Estimated Breakeven can be seen in my following chart:

As you can see, Pan American Silver’s estimated breakeven back in 2016 was $15.71 and they made $1.54 an ounce profit. I just looked at the first three quarters of 2017, and on $591 million in revenue, they made $54 million in adjusted income. Thus, they made a 9% profit. They sold silver for an average $17.16 for Q1-Q3 2017, so their estimated breakeven is $15.66, with $1.54 profit per ounce.

We must remember, CASH COSTS and AISCSOS deducts Pan American’s BY-Product Credits to get that low Cash cost of AISCSOS cost metric. But it doesn’t really mean anything.

For example, Pan American’s Silver Revenues were only 46% of their total revenues, while Base Metals & Gold were 56%. If you deduct 56% of your revenues from your costs, you can get a very LOW CASH COST or AISCSOS. But, Pan American Silver only made $54 million in adjusted Income based on $591 million in total sales. Again, 9% profit equates to a breakeven of silver at $15.66… right in the $15-$17 range that I have stated.

If we were to REMOVE Pan American Silver’s $331 million of by-product credits from Zinc, Lead, Copper, and Gold from their bottom line (as they do to get their Cash Costs and AISCSOS costs) their $54 million in adjusted income would turn into a $277 million loss.

Ypu made a right point in my opinion. The issue is that contrary to gold where there are much more primary gold producers, if base metals (and/or gold) would increase a lot, you could produce more silver even below 10 usd/ounce.

Old people will just work for cryptcoiners (I am not one of them) until their 80’s, pure and simple.
This IS pure capitalism, at its finest. Who has the money triumphs, cryptos holders, who have not will obey or die alone.
In America, you still live in the fairy tales of the golden age (paradise lost) of capitlism.

Some have mentioned the tremendous percentage change in price of cryptos when measured in dollars.
Rather curious that many who know the lost value of the dollar still use it as a yardstick.
Just a few days ago the equity mkts shot up while no one mentioned how much the dollar went down at same time.
In reality those with equity positions lost purchasing power even though the mkt shot up.
If one would go to coinmarketcap.com, click on a coin, bitcoin, it will take you to a chart measured in dollars. However at bottom of chart there is “log scale” option which shows chart in percentage change, rather interesting in that the charts flatten out.

Folks we are in a new paridigm but still measuring everything against a dollar currency which is floating all over the place. It’s like saying yes my shirt is soiled but compared to that pig over, I’m very clean.
If someone could come up with a good yardstick, I think they would be way ahead of the game.
Heck the yardstick might be a good pair of Redwing work boots or a man’s suit of clothes, I don’t know, I just want some stability.

For about 88% of the last 3,000 yrs a man’s yearly avg. wage was 40-60 oz silver. If we put today’s avg. wage at 50,000 to 60,000 per yr. and use 50 oz for the avg. yearly earnings over the majority of the last 3,000 yrs., then silver should be around $1,000 per ounce.
Gold should be somewhat higher depending on whose inventory figures you believe.
The PMs are controlled, man’s suites are not. However I do feel if PMs were free to seek their true value, the public would see how much true inflation we have because of a deflated dollar and a man’s suit might go up matching the price of gold per oz.
One thing I’ve considered as a good yardstick is the price of a postage stamp. Within it should be the accumulation of many things in the economy such as price of fuel, labor, etc.

PS
Another thing I find interesting is those who speak about the tremendous gains in cryptos will in almost the same breath talk about PM’s making moon shots when they are released from control.
Silver from $20 to $1,000 would be 5000% gain putting bitcoin to shame.
Cryptos are a view of an unregulated economy at work seeking equilibrium.

If you can find me a tailor who can make a custom tailored suit of high quality for USD1350, let me know. I’d rush him with a couple of orders. Perhaps using polyester fabrics. Try a high quality Italian wool suit using Loro Piana fabric. It would set you back at least 2.5oz worth of gold. Like all these folksy tales, they are repeated ad infinitum. Nobody every cares to check the facts. Repeating something over and over doesn’t make it true…………

I get my suits tailored in Singapore. If it’s not ‘guaranteed’ then it’s a cheap China copy………yes, in Asia anything is possible. But that doesn’t challenge my assertion that a high quality suit isn’t available for USD1350 – ANYWHERE on earth! Gold has a lot of catching up to do in terms of inflation.

So either you are not well enough versed in cloth or are the type of person that buys labels. So lets bring it closer to home. The old saying also says you can buy a “GOOD” rifle for an ounce of gold. How is a
Browning® X-Bolt Stainless Stalker Bolt-Action Rifles
• Free-floating, stainless steel barrel
• Glass-bedded, matte-black composite stock
• Inflex Technology recoil pad
• Weatherproof Dura-Touch Armor Coating
• Adjustable Feather Trigger
Item: IK-216582 $999.99

An ounce of gold is still the standard. The fact that our government has trashed the value of our dollar doesn’t really change the fundamental store of economic energy stored in an ounce of gold (or silver for that matter).

I don’t understand the argument. What has a modern rifle to do with the 5000-year old history of gold? The saying that an oz. of gold could buy a high quality, tailor-made suit during Roman times and still can today has nothing to do with modern rifle technology. What’s the relevance?

Are you being intentionally obtuse or do you just like the intercourse?

It is the acknowledgement of the intrinsic economic store of value of gold. The saying arose in the 19th century and continued in to the early 20th century that an ounce of gold could buy a man a custom tailored suit or a good rifle. Doesn’t have shit to do with the Romans or anybody else. The point today is that the FED has totally debased the dollar but that an ounce of gold never changes. An ounce of gold will buy what it has always bought and will always buy. There is no debt associated with the gold unlike the dollar and all of the other fiat currencies.

Great video Steve, your work is top notch. I keep watching the Schiller P/E for the S&P continue to skyrocket,it is currently 33.75%! I don’t know if this is even taking into consideration stock buybacks with cheap TARP money.
I don’t dispute your crypto currency stance. In a world of $450 million dollar DaVinchy paintings of questionable origin I suspect the current craze my have a lot more room to run. Is it possible that some, not all, crypto’s are going through a S curve style adoption rate as the internet did in the early days. The current token frenzy definitely looks like the dot com bubble of the late 90’s but I suspect some of the more useful and better designed ones will survive, time will tell.

FANG stocks are carriers of greed and deception within the stockmarkets. Too much promises that cannot fail. AI; artificial income. End of days for the fogs of fiat. FANG’s won’t fail, currencies will. JP Morgan is leveraged failure. Caterpillar is the Last of the production Mohicans. Very nice, this tube. Where’s Joe L. when we need him?

I have often said; the only way I could have accessed material like this a few years ago was to wade through book after book after book. I could not have accessed it at a university because “Critical thinking” or Disciplined thinking” is not taught or discussed anymore!

I realise it is very difficult to be “Objective” (Not influenced by personal feelings or opinions in considering and representing facts), rather than “Subjective” (Influenced by personal feelings, tastes, or opinions) in this world of dependability, the latter being a major cause of concern.

I would say to any of the dissenters; “If you want to be told what you wish to hear, sign in for a college or university course”. How much will that cost you?

Great content again. While I disagree with the tone of most “dissenters”, one cannot objectively discount facts. Who on this site made – and kept ! – real money on PMs/miners ? When they ran up in 09-11, most of us made the mistake of listening to “alt/Austrian” hacks like Schiff, Mike Boloney, etc who said gold would “go to the moon”/“$10 000” because of QE, and promptly lost most/all of our gains when it plummeted.
My (and most other investors) best investments are stocks like Tesla (sold it after a 12 bagger), financials, fangs, etc. Didn’t get into bitcoin until very late, but still netted 40% in a month. I know the “yeah but it’s/stocks are gonna tank” club, but one would have to be an idiot to keep an investment forever (other than a small amount of Au/Ag), and if the Dow tanks, it’ll likely recoup in a hurry. Again. You may think different, but it’s just an opinion – and one that has been wrong for a very long time.

Yes, you THINK. Which is way easier than actually LOOKing at a chart of 1987, 2000,2008 etc crashes.
If your brain is wired for fear , you’ll always believe the catastrophe theories – even though they never seem to happen.

Just because 99% of the cryptos out there at best have no chance of making it in the real world and many of those are nothing but scams, does not mean that Bitcoin and a handfull of others are not for real. In case your not aware the first lightning transactions have now been done on the real bitcon platform so now we just need some patience till it gets implemented in the wallets and exchanges. As far as I know this will be easy to scale making most transactions instant and for tiny costs. so the addition of miners and their high energy costs will not be growing anywhere near in proportion to the amount of transactions performed. Add the Atomic swaps and we’ll soon be having easy to use cryptos. Add the onion protocol for better privacy and the world will never again be the same. Fighting it is worse than useless.

BTW Market cap in cryptos is a misnomer, the way they come up with that number is the amount that a coin is trading for at the moment times how many coins have been issued, which explains to me the big swings we see in crypto markets and how coins can be pumped and dumped. So you really should keep that in mind if your thinking about buying into some scam like Ripple where most of the coins are still held by the company.

What if crypto’s are used to fade out fiat currencies? There’s too much debt, and we cannot blow it up because that would mean the end of trade. And with that, the end of us. A temporary measure to extend & pretend. Ripple could become the next reserve currency, as an anchor for 1300+ other crypto’s. When crypto’s start working and XRP’s value rises, they add a few more, up to 100 billion. That’s my current way of thinking. That could change tomorrow however.

The comparison SteveR made in his video is quite unusual. Caterpillar, JP Morgan, and Amazon are companies, but Bitcoin is not. He compared the stocks of those companies with a digital currency made by a ninja.

Nice video Steve. You can’t price bitcoin or other cryptos based on cost of production. 2nd generation Proof of Stake (PoS) coins cost nothing to mine. dBFT coins like NEO also cost nothing. That doesn’t make them worthless. Some cryptos will have earnings, but those that are currencies (like bitcoin, LTC, QRL, etc) will not. Those can’t be valued based on stock metrics like future earnings and PE ratios. They are currencies that will replace the fiat disaster. They are valued based on the network of users deciding to use them in the future. They are volatile because the market is so small and new. Given 10 years and mass adoption, the currencies will be much less volatile.

When comparing PE ratios and other metrics of companies like Walmart to media darling companies, the latter are allowed to get away with accounting “irregularities”…and they are never called out on them [investigated and punished] by regulatory agencies like the SEC. That wouldn’t fit the narrative by TPTB. Furthermore the media, where true investigative journalism is largely dead [replaced by what is allowable by TPTB] won’t look at evidence of impropriety or fraud either.http://investmentresearchdynamics.com/?s=Amazon

2 questions which people like you refuse to answer:
-if the stock market and housing are in bubbles, why don’t they go down?
-if gold and silver demand is high and supply is limited, why don’t they go up in a sustained way? why are they both down from 2011?

And if you say you’ve already answeres that, then the next question logically is: why can’t the process continue indefinitely?

See my point. Whatever explanation you give for the current state of affairs, you still don’t give an explanation for why or how it will end. None of you do.

Very good point. Constantly saying, ” it’s going to end, it is really” doesn’t say anything with out an operational explanation of how that is going to happen. I believe infinite fiat will control the stock, bond and PM markets as long as the dollar is the world reserve currency. When that changes all bets are off. By the way, Cryptos are the way out of this manipulation as you wait for the release of the PMs. As Rob Kirby has stated, ” crypto is the only freely traded market on the planet” I agree, until King Dollar dies the manipulation continues. ( or physical delivery failure in the PMs )

The world is finite, it’s resources are finite but the human population is exploding. The end of oil is on the near horizon and with its end comes the end of civilization as we know it. The third world will be totally decimated with fatalities in the 90% range. The developed world will not be appreciably better with fatalities in the 50-60% range. The timing, as always, is the burning question. The answer depends on too many factors to be definitively answered. We can however, look at the most important variables, number one is energy and, even more important, specifically liquid fuels energy and number two is debt. On or about August 1, 2014 there was a paradigm shift in the energy world. Oil stopped being produced based on its ERO(E)I but entered the era of massive debt subsidization of ERO(E)I which continues out of control today.

Ignoring the possibility of a new war, there are two likely possibilities for the collapse and of its timing. The first, my current odds on favorite, is that the rise in interest rates (that is inexorably coming), will cause a default somewhere that will begin a cascading liquidity crises and our financial system will come to a screeching halt. It appears that this will probably happen by 2022 based on debt growth projections and the FEDs tightening guidance. If by some fiat magic the FED and other central banks can pull the rabbit out of their asses, the folly will continue until even subsidized ERO(E)I finally reaches 1/1. This may take five years or so longer. Either way the end of the oilcene era is coming and with it chaos. Back to bicycles, horses, buggies, oxen driven plows and all of the other old fashioned ways.

The only way to survive the chaos is to be well prepared – mind, body and spirit.

The “VERTICAL MANAGEMENT” model in the past will no longer suffice in the future. It is outdated. It was setup (perhaps in ignorance) to benefit the few. People are starting to wake up to the “Reserve Dollar” sleight of hand magic.

The BANKS vs Crypto/Digital world is going to be interesting. Hopefully some good will come eventually. IMO most people (and I mean most) don’t have any idea of the velocity or concept of money. Perhaps I have my head up my a%#e BUT it is true.

Once you fully understand the CONCEPT of money; you will understand why people will put their money into PM’s and I believe other resources like TIN, COBALT, NAIOBIUM, TANTALUM Rare Earths and the like. Take a real good look at the resource charts; they are cheap, cheap, and cheap. So it all becomes a bit of a lucky dip BUT that’s life.

People all over this world live without the luxury of technology or energy to benefit their world; so if our “Playroom World” collapses BUT I still have some energy to my house I will consider myself lucky. I can survive on that!

I am all for women, thought I was responding to men. And you are right that most people do not understand money, its velocity, the creation and flow of liquidity and the dangerous potential of swaps/derivatives/purely paper options.

I also have tin and antimony because of their effects on lead bullets at high velocities. The rare earths and other esoteric metals all become worthless when the grid goes down.

Where I disagree is “People all over this world live without the luxury of technology or energy to benefit their world;”. There are very few peoples that truly live without the benefit of energy or technology. There are the primitive tribes of the Amazon and Indonesia with very little or no contact with modern man. All others, the very poor of asia, india, south american and africa, benefit, through the myriad of governmental and non governmental aid programs, that exist due to the cheap and easy energy that we have all been incredibly lucky to have for the last 100 years. The populations in some of these regions. most notably africa, have grown well beyond any possibility of self survival. They will be the first victims.

IMHO the timing issue is all about public opinion and quiet frankly the public has no opinion grounded in sound economics.
Sure those in these sites are aware, but talk to your friends, most say not to worry this thing has gone on for a good while now and the govt will do whatever is needed to sustain.
Most see the stk mkt going up making their IRA and retirement look good while going to Walmart and seeing full shelves all the while not noticing there is much more room to walk between the rows of shelves and rings of clothes.
As Steve has pointed out PE ratios are way out of line, but the avg man on the street knows nothing of PE ratio, only price.
Its like flying in jet airline, you have no conception of speed and feel everything is fine until the mountain pops out of the fog.
No economic forecaster can anticipate the tipping point, but when it happens and public physcology shifts, watch out.

BTW the talk (I would call it waffle) about whether a stock, commodity or crypto is in a bubble is a “No Brainer”. Ask yourself, “What is fair value”?

Have a look at the Dow Jones over the last 85 years; it has (essentially) increased at an exponential rate of 100% every 10 years. Currently it is increasing exponentially by 100% every 5 years.

So if we consider an exponential increase of 100% every 10 years as being fair value,; then the Dow Jones is currently in a bubble and BITCOIN which is increasing exponentially by 100% every 29 weeks is also in a bubble. So are many more stocks.

I could ask the question; “Where does fair value stop and GREED start”?

I could ask the question; “Where does fair value stop and GREED start”?

I would term it as when did fair value stop……..
IMO it stopped shortly after computers and the Internet became something every person could own and participate in. Time sped up, folks no longer had to wait until tomorrow’s mail to see the mkt movements, 24hrs turned into seconds. Folks realized they could jump in and out of mkts within minutes, they became price traders rather than long term value investors.
The public is only reacting to the big boys ability to see the future sooner, quicker.

We’ve all seen old pictures of NY traders standing over one of those new fangled ticker tapes, same thing. They had a trading advantage at the time over someone in flyover country who had to wait days for their copy of Wall St Journal.

If history is true, mkts will only get faster and faster. Folks trading on price change alone because there is not time to study underlying fundamentals. Folks are attracted to cryptos because there are no fundamentals, only psychology reflected in the next tick.

Are cryptos a bubble? In this highly inflated world everything is a bubble that is not an ever decreasing natural resource. But the game is which one will re-inflate the fastest.

“Where does fair value stop and GREED start”
Alan Greenspan said in 1966 in ” Gold and Economic Freedom” that:
” The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.”

There you have it. TPTB have done a great job fleshing out Greenspan’s principle. They have by unlimited fiat kept the prices of the PMs down and under control. THAT is the reason for the surge in crypto assets. It is not GREED that motivates those to own them but the desire to PROTECT one’s wealth from an ungodly state that is GREEDY. Remember this and you will understand cryptos, ” Quadrillions if fiat chasing Billions of Cryptos”

As I have mentioned before, Steve: I admire the depth of your research and your expertise in the field of EROI. However, of late, I see that you also comment on the virtue or otherwise of Bitcoin (BTC). To PM commentators, in general, BTC is like a red cloth to a bull. Not sure why that would be. Here is a simple test for all BTC ‘experts’ to carry out before commenting on the subject. If you answer ‘NO’ to any of the following questions, please refrain from having an opinion on BTC:

1. Have you read the Satoshi white paper describing the basis of BTC (published in 2009)?
2. Have you ever established your own BTC wallet?
3. Have you ever bought any BTC?
4. Have you ever carried out a transaction sending BTC from one wallet to another?

Most BTC commentators will have to answer ‘NO’ to ALL of the above questions. So why do they have an opinion on a subject they have done ZERO research on?
How about you, Steve? How about you let your readership know where your own expertise on the subject of BTC really stands?
When I hear somebody calling BTC a BUBBLE or a PONZI or a new TULLIP CRAZE I know right away that that commentator has done absolutely no research into the subject.

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